Someone caught me when he asked a friend: How much is the dollar exchange rate today? The latter replied: Before or following your question? Yes, it is a nice joke in form, but in content, it refers to a bitter reality that is haunting the Lebanese, as the exchange rate no longer changes between one night or one day to another, but rather between moment and moment.
After the dollar doubled last week 22 times from what it was in the past to reach 33 thousand, it returned to record a noticeable decline, leaving the majority of the people in a state of loss and uncertainty. Whoever catches “Fresh” on the one hand does not rejoice in this decline, and is waiting for the exchange rate to rise once more. As for the rest of the Lebanese people, they have had enough and lost their nerves from the manipulation of the price and the continuous collapse of the national currency.
In this context, he explains Economist Patrick Mardini kataeb.org The significant rise in the exchange rate of the dollar in the last period is due to the problems that the country has experienced, specifically the events of Tayouneh, the government’s suspension of its meetings, and the ensuing tension in the relationship with the Gulf countries, which exacerbated the crisis and made the Lebanese flee the lira and resort to raising the demand for foreign currency following they lost their confidence the economic situation in the country.
Mardini added: “What contributed most to the rise in the price of the dollar is the circular 158 issued by the Banque du Liban, which is concerned with adjusting the price of dollar deposit withdrawals from banks and raising the exchange rate of the dollar from 3900 to 8000 pounds. All of these factors actually led to what means that the size of the monetary mass in pounds increased and pumped More money supply will turn into an increased demand for the dollar, and consequently an increase in the exchange rate.”
He continued, “The Lebanese market is thirsty for the dollar, and the Central Bank has tried to intervene in circular 161 to curb the rise in the exchange rate, by absorbing the Lebanese pound from the market by buying it and pumping in its place the dollar, which means an increase in the dollar’s supply and demand for the lira.”
Although Mardini noted this step, which would calm the madness of the high exchange rate, and this is what we see today, he indicated that the decline will not be much or less than the exchange rate on the one hand, stressing on the other hand that the Central Bank’s move remains unsustainable Its aim is to buy time and waste depositors’ money.”
He explained, “The main problem lies in printing the lira to turn into a demand for the dollar, which means an additional loss for the BDL’s foreign currency reserves.”
There are two options between them
On the future of the dollar and the expected scenarios, Mardini stressed: “Lebanon is at a crossroads. Either we stay where we are, that is, we continue with the floating exchange rate system with the intervention of the Central Bank, and then there is no ceiling for the rise of the dollar and no bottom for the collapse of the lira, as we will lose the reserves in the Bank of Lebanon, and this is for me.” A very bad choice.”
As for the second option, it is that “Lebanon gets out of this floating system and enters into the monetary board system, that is, the currency board, which restricts the work of the central bank and obligates the printing of a lira covered with the dollar’s reserves, which will stop the exchange rate rise in a period of less than a month. Monetary stability and thus increase confidence and the country’s exit from its crisis.
He concluded: “This option today is the solution before the Mikati government and the ball is in its stadium!”